Presale Condo Financing in Seattle: Buying a Home That Is Not Finished

Presale condo financing in Seattle works differently from any other purchase: you sign the contract and put down a deposit now, but the mortgage itself closes only when the building is finished, often a year or more later. Until then the lender is underwriting two things, you and the project. On a conventional loan the building or its legal phase must be substantially complete, with a certificate of occupancy, and at least half its units must be sold or under contract to owner-occupants or second-home buyers. FHA and VA each need the project itself approved first. Plan for the long gap, and ask the developer the right questions before you sign.

New towers and mid-rises in South Lake Union, on Capitol Hill and on First Hill often start selling before the concrete is dry. The sales office shows finishes and floor plans, takes a deposit, and gives you a closing date that is really an estimate. Buyers who ask me about presale condo financing in Seattle usually want a loan on a home that does not exist yet. Nobody lends on it until it does. What you can do now is choose a building and a contract that a lender will be able to finance when the doors open.

For this page I read Fannie Mae Selling Guide sections B4-2.1-01 (project types), B4-2.2-01 (Full Review), B4-2.2-02 (new and newly converted condo projects) and B4-2.2-04 (Project Eligibility Review Service), each dated 08/05/2026, and B1-1-03 (allowable age of credit documents, 04/02/2025); the condominium sections of HUD Handbook 4000.1 in its current update, including Condominium Project Approval and Single-Unit Approval; Chapter 16 of VA Pamphlet 26-7 and 38 CFR 36.4360; and the Washington Uniform Common Interest Ownership Act, RCW 64.90.610, 64.90.630, 64.90.635 and 64.90.645, all on October 27, 2026. Freddie Mac's condo project guide was not read for this page. The purchase contract, the public offering statement and any warranty questions belong with your broker and an attorney, not with me.

What Presale Condo Financing in Seattle Covers

There is no construction loan in a presale condo purchase. The developer finances the building. You sign a purchase agreement with the developer, called the declarant in Washington's condo law, and pay an earnest money deposit. Then you wait. When the building is complete and the condominium is legally created, you close with an ordinary purchase mortgage: conventional, FHA, VA or a jumbo loan.

That makes presale condo financing in Seattle a timing problem more than a product problem. Three questions decide it:

• Will the building meet the lender's project rules on the day you close?
• Will your own income, debts and savings still qualify on that day?
• What happens to your deposit in the meantime?

Rate locks and builder incentives on a long escrow are covered in my guide to a new construction loan in Seattle. This page covers the part that is unique to a condo: the building's own approval.

Why a New Building Gets Its Own Review

Fannie Mae sorts every condo project into new or established. Under B4-2.1-01, a project is new if any one of these is true:

• fewer than 90 percent of the units have been conveyed to buyers;
• the project is not fully complete, including proposed or new construction;
• it was newly converted to a condominium;
• it is subject to more phasing or annexation; or
• the homeowners association is still in the developer's control.

A tower that is still selling meets several of those at once, which is why presale condo financing in Seattle always starts with the building, not the buyer. A new project cannot use the lighter review an established building gets, because there is no history: no years of budgets, no record of dues being paid, and an association run by the developer. The lender has to look at what is promised instead, which is why the rules below focus on completion, sales and the legal documents.

Conventional Presale Condo Financing in Seattle: The 50 Percent and Completion Rules

Fannie Mae's B4-2.2-02 lists the extra requirements for a unit in a new condo project reviewed by the lender. The ones that shape a presale purchase are:

• Substantially complete. The project, or the legal phase your unit is in, must have a certificate of occupancy or similar document, and all units and buildings in that phase must be complete apart from buyer selections such as appliances, floor coverings, counters or light fixtures. A buyer selection that changes the floor plan must be finished.
• One legal phase per building. A single tower cannot be split into several legal phases for this review.
• 50 percent sold. At least half of the total units in the project or subject legal phase, counted together with prior phases, must be conveyed or under contract to principal residence or second home buyers. Investor contracts do not count toward the 50 percent.
• Ready to move in. Your unit must be available for immediate occupancy when the loan closes.
• Completion and defect assurances. If the phase is only substantially complete, the lender must see cash deposits, letters of credit or similar assurances that the common elements will be finished, plus assurances against construction defects covering each unit for one year from its closing and the common areas for one year after units holding 60 percent of the votes have transferred.
• Legal documents. For projects over four units, the declaration has to protect the lender's position, including notice of 60-day dues delinquencies and mortgagee votes on material amendments.

The lender can review the project itself, or submit it to Fannie Mae's Project Eligibility Review Service (PERS), which is optional for most new condo projects. Under B4-2.2-04, a PERS Conditional Project Approval expires in 9 months and a Final Project Approval in 18 months, and a loan cannot be sold to Fannie Mae under a conditional approval. A building with Fannie Mae approval early in its sales period may need that approval renewed by the time you close.

If the building cannot meet these rules on your closing date, the conventional path closes. That is when buyers end up looking at a non-warrantable condo loan, which usually means a larger down payment and different pricing. Lenders can be stricter than Fannie Mae, and Freddie Mac has its own project standards that I did not read for this page; the lender confirms which rules apply to your file.

FHA Presale Condo Financing in Seattle: Project Approval First

FHA lends in a condo building only if the project is on FHA's approved list or the unit qualifies for Single-Unit Approval. For a presale buyer, Single-Unit Approval is effectively off the table. HUD 4000.1 requires the subject unit's certificate of occupancy to have been issued at least one year earlier, or the unit to have been occupied, and requires control of the association to have passed from the developer to the owners. A brand-new unit in a developer-controlled building meets neither.

That leaves full project approval. For new construction, HUD 4000.1 requires:

• a Complete Condominium Project or Complete Legal Phase, meaning every unit is built out and has a certificate of occupancy or its equivalent; in vertical buildings, at least a temporary certificate of occupancy for the units in the phase;
• an owner occupancy percentage of at least 30 percent of the declared units for complete new construction projects, where units still owned by the developer do not count as owner-occupied;
• the builder's certification of plans, specifications and site, with engineering reports for any issues it lists; and
• a proposed budget if no units have closed yet, and a builder's insurance policy in place of the full insurance package until the first unit closes.

For FHA presale condo financing in Seattle, the developer has to want FHA approval and pursue it; a buyer cannot request it alone. If FHA matters to your plan, ask the sales office whether they intend to submit the building and when. My guide to FHA condo approval in Seattle covers how to check the approved list.

VA and Presale Condo Financing in Seattle

VA Pamphlet 26-7, Chapter 16, says a condominium must be approved by VA before any unit in it is eligible for a VA loan. The lender or the developer sends VA a written request with the condominium's organizational documents. Projects already approved by HUD generally do not need a separate VA review, so a building that wins FHA approval often opens the VA path as well.

When VA approves a project, its notice can carry conditions that must be met before VA backs any individual loan, such as recording the documents, a presale requirement, or finishing the common areas. Chapter 16 also caps how long the developer may control the association: no later than 120 days after 75 percent of the planned units are conveyed to owners, with an outside limit of seven years from recording the declaration, or five years after the latest annexation in a phased project. My VA loan condo guide explains how to look a building up on VA's list.

The Long Gap: What Washington Law Says About Your Deposit and Closing

Washington's condo law, RCW 64.90, has several provisions written for exactly the situation presale condo financing in Seattle creates. In outline:

• The public offering statement. A developer selling new units must give you one (RCW 64.90.605). Among many other items, RCW 64.90.610 requires it to state the status of construction and estimated completion dates, the projected association budget, a summary of any reserve study, any construction warranties, and whether bonds or other assurances back completion of the improvements.
• A seven-day right to cancel. Under RCW 64.90.635, you may cancel within seven days after first receiving the public offering statement, without penalty and with prompt refund of your payments. If you received it more than seven days before signing the contract, that cancellation right does not apply. Receiving an amendment later does not restart it.
• Your deposit is held in escrow. RCW 64.90.645 requires earnest money paid to a developer to be held in a Washington escrow or trust account until closing, default, refund or a court filing. If the contract allows it and the developer carries a surety bond in your favor, deposit funds may be used for construction costs once construction has begun, but no more than five percent of the purchase price.
• No closing until the unit is finished. RCW 64.90.630 allows the contract to be signed early, but the unit cannot be conveyed until the declaration and map are recorded and the unit, and the building's structural components and mechanical systems, are substantially complete, unless you agree otherwise in writing.

Read the contract's deposit language to see whether your money can be used for construction, and what happens to it if the project is delayed or cancelled. Those are contract questions, so take them to your broker or an attorney. Once the building is established and units start reselling, the resale certificate takes the place of the public offering statement.

What a Pre-Approval Is Worth Eighteen Months Out

A pre-approval letter is useful at signing to show the developer you can likely finance the unit. It does not carry you to closing. Fannie Mae's B1-1-03 says credit documents, meaning the credit report and the employment, income and asset documentation, can be no more than four months old on the note date, for new construction as well as existing homes. On a presale purchase, that means your file is rebuilt near the end: new pay stubs, new bank statements, a new credit report and a fresh employment check.

For presale condo financing in Seattle, four things can change during the wait:

• Your job. A new employer or a move to commission or contract pay can change how income is counted.
• Your debts. A car loan taken out during the wait counts against you at closing; see how debt-to-income ratio is calculated.
• Your savings. The down payment and closing funds still have to be there and documented.
• Loan limits. The 2026 King County conforming and FHA one-unit limit is $1,063,750. Limits are reset each year, and FHFA is expected to announce the 2027 figures in late November 2026, so a unit priced near the line could fall on either side by the time you close. My high-balance versus jumbo guide covers the difference.

You are not locked to the lender that wrote your pre-approval. Many buyers re-shop their presale condo financing when the completion date firms up; my guide on switching mortgage lenders covers what transfers and what does not. Long rate locks are covered on the rate lock page.

Questions to Ask the Sales Office Before You Sign

• How many units are in the building, and how many are under contract today? How many of those are buyers who will live in the unit or use it as a second home?
• Is the building one legal phase, or will phases be added?
• What is the estimated certificate of occupancy date, and what does the contract say if it slips?
• Has the building been submitted to Fannie Mae's PERS, to FHA or to VA, and what is the status of each?
• Which lenders have already reviewed the project?
• Where is my deposit held, can any of it be used for construction, and is there a surety bond?
• Can I see the public offering statement, the projected budget and any reserve study now?
• Are there rental restrictions, commercial space or developer-retained units in the building?

The answers decide which loan types your presale condo financing in Seattle can use on closing day, so ask before you sign, while the seven-day window still means something. My South Lake Union and Capitol Hill neighborhood guides cover where most new condo inventory in my area sits.

Presale Condo Financing in Seattle: Conventional, FHA and VA Side by Side

A summary of the presale condo financing rules in Seattle above, as read October 27, 2026. Lenders may apply stricter requirements.

An Illustrative Presale Timeline in South Lake Union

This example is illustrative only, with dates and a price chosen on October 27, 2026. It is not a quote, uses no interest rate, and does not describe any real building or buyer.

A buyer signs a contract on Monday, November 9, 2026, for a one-bedroom unit priced at $650,000 in a new South Lake Union mid-rise, with a $20,000 earnest money deposit. The sales office estimates completion in spring 2028.

• Before signing: the buyer reads the public offering statement with an attorney, notes the date it was received for the seven-day cancellation window, and confirms that the contract says where the deposit is held and whether it can be used for construction.
• Through 2027: the buyer keeps the job, avoids new debt and keeps the down payment in documented accounts. Sales in the building climb past half the units, mostly to owner-occupants.
• About 90 days before the estimated completion: the buyer chooses a lender, applies in full and plans the rate lock.
• Certificate of occupancy issued: the lender confirms the building meets the project rules for the loan type on the closing date, and the buyer's documents are dated within four months of the note.
• Closing: the unit is ready for occupancy, the deposit is applied, and the loan funds.

Every date in a presale condo financing timeline like this belongs to the developer, the contract and the lender's review, not to a promise. If sales stall below the threshold, or the building misses an approval, the loan options at closing may be narrower than they were at signing.

FAQ: Presale Condo Financing in Seattle